Arab News, Monday, Jan 13, 2020 | Jamadi Al Awwal 18, 1441
Saudi Aramco raises IPO to record $29.4 billion with over-allotment of shares
Saudi Arabia: State-owned oil company Saudi Aramco said on Sunday it has
exercised its “greenshoe option” to sell an additional 450 million shares,
raising the size of its initial public offering (IPO) to a record $29.4 billion.
Aramco initially raised a then-record $25.6 billion in its IPO in December by
selling 3 billion shares at 32 riyals ($8.53) but indicated it may sell
additional shares through the over-allotment of shares.
A greenshoe option, or over-allotment, allows companies to issue more shares in
an IPO when there is greater demand from participants during the initial
Investors were allocated the additional shares for the option during the
book-building process, Aramco said.
Aramco said “no additional shares are being offered into the market today and
the stabilizing manager will not hold any shares in the company as a result of
exercise of the over-allotment option.”
Aramco shares have been volatile recently because of geopolitical concerns as
tensions between the United States and Iran rose after President Donald Trump
ordered a drone strike that killed a top Iranian commander and raised fears of
Shares of Aramco fell to 34 riyals on Jan. 8, its lowest since the stock began
trading on Dec. 11, but closed at 35 riyals on Thursday.
Thursday’s closing price valued Aramco at $1.87 trillion, above the IPO price,
which valued the company at $1.7 trillion, but below Crown Prince Mohammed bin
Salman’s coveted $2 trillion target.